TD Bank 2001 Annual Report Download - page 25

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23
HOW WE PERFORMED IN 2001
MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATING PERFORMANCE
TD Waterhouse
Fiscal 2001 was an extremely difficult year for TD Waterhouse.
The significant decline in market price levels and stock market
activity, which began in the second half of fiscal year 2000,
continued throughout 2001. This contributed to a continuing
decline in revenue and the reduction in year-over-year net
income, despite our significant progress in reducing costs
through Project 200 (a plan to reduce costs and increase
revenues), and our restructuring and revenue enhancement
initiatives. During the year, however, we opened 535,000
new accounts and executed an average of 116,300 trades a
day. Despite the downturn, we remain committed to strategic
investments in our brand and technology to improve our
customers’ experience and our operational efficiency over the
long term.
TD Wealth Management
TD Wealth Management continued to build total assets under
management this year to a record $119 billion. Our customer
base of retail, high net worth and institutional clients continued
to grow despite a very challenging environment characterized by
poorly performing equity markets and the slowing economy.
The decline in overall profitability can be attributed to
declining full-service brokerage activity, a shift in overall assets
to money market from equity assets, and strategic investments
in our global funds and financial planning initiatives.
(millions of dollars) 2001 2000 1999
Net interest income (TEB) $80 $66 $48
Other income 618 633 379
Total revenue 698 699 427
Provision for credit losses –1 –
Non-interest expenses excluding non-cash goodwill/intangible amortization 523 488 331
Net income before taxes 175 210 96
Income taxes (TEB) 75 95 43
Net income – operating cash basis $ 100 $ 115 $ 53
Selected volumes and ratios
Assets under management (billions of dollars) $ 119 $ 112 $ 69
Economic profit 78 92
Full-time equivalent staff at October 31 2,952 2,906 2,041
Operating cash basis return on economic capital 61% 65% 36%
Operating cash basis efficiency ratio 75% 70% 78%
(millions of dollars) 2001 2000 1999
Net interest income (TEB) $ 400 $ 538 $ 308
Other income 1,216 1,746 1,180
Total revenue 1,616 2,284 1,488
Non-interest expenses excluding non-cash goodwill/intangible amortization 1,508 1,679 1,094
Net income before taxes 108 605 394
Income taxes (TEB) 54 250 165
Non-controlling interest 636 5
Net income – operating cash basis $ 48 $ 319 $ 224
Selected volumes and ratios
Total customer assets (billions of dollars) $ 199 $ 242 $ 182
Economic profit (loss) (119) 179
Full-time equivalent staff at October 31 5,992 8,319 6,123
Operating cash basis return on economic capital17% 54% 17%
Operating cash basis efficiency ratio193% 74% 74%
1Excludes special items of TD Waterhouse in 1999 and 2001.